Greece told to tighten its belt

Jean-Claude Juncker

Greece has been told by the eurozone chief that it must make tougher spending cuts and new taxes, including a tax on luxury goods and cars, or face sanctions.

The chief, Jean-Claude Juncker told Deutschlandfunk German radio that Greece must understand that other eurozone members are not prepared to pay for its mistakes.

The warning comes only days after the European Union vowed to help Greece, as the bail-out talks prove unpopular, despite the fact that Greece's deficit has sent the euro to a nine-month low recently.

Mr. Juncker - chairman of the 16 nations that share the single currency and also Luxembourg's prime minister - has said Greece agreed to outline additional cuts in March if necessary, the BBC state.

"Greece must know that taxpayers in Germany, Belgium, the Netherlands and Luxembourg aren't ready to correct the failings of Greek budgetary policy," said Juncker, who is currently attending a meeting of EU finance ministers in Brussels.

He added that further measures would be imposed if Greece's debt reduction plans were not shown to be on target by 16 March.

A problem for Greece

Greece's debt crisis is "first and foremost a Greek problem and an internal Greek problem," Mr. Juncker said. "The financial markets are completely wrong if they think they can destroy Greece."

Without giving exact details of what they plan to do, Europe's leaders pledged to help Greece last week.

"We won't abandon Greece," French Finance Minister Christine Lagarde announced to reporters. "It's clear that we are all in this together."

Greece is trying to reduce its huge public deficit from 12.7 percent - more than four times what single currency rules allow. During 2010, the country has pledged to reduce this to 8.7 percent under a plan which involves major cuts in public spending. But those plans are hugely unpopular with the Greek public and massive strikes have already been scheduled.

Greece's Finance Minister George Papaconstantinou said that he wanted the other eurozone nations to release details of their planned bail-out for his country to ease market fears that the country could default on its debts.

Yet, Mr. Juncker said it would be "unwise" to publicly detail "the measures we are putting in place".

Mr. Papaconstantinou has said repeatedly that his country isn't asking for financial help from Brussels. Ministers and bank officials from the eurozone continue to meet in Brussels on Tuesday to discuss measures.

Jodie Humphries

Jodie Humphries graduated from Bath Spa University with a BA Hons in Creative Writing in 2008. She has worked for GDS Publishing for the digital group since July 2009. She has previous experience with writing for the web, running her own website since April 2007.

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